Note: Enter your answer and show all the steps that you use to solve this problem in the space provided. Yvonne put $4,000 in a savings account. At the end of 3 years, the account had earned $960 in simple interest.

a. How much does she have in her account at the end of 3 years?
b. At what annual simple interest rate did the account grow? Show your work.
c. How many more dollars would she have in her account if the interest rate were 1% greater? Show your work.

A) At the end of 3 years the amount in the account = Principal + Interest

Amount = 4000 + 960 = 4960

Amount at the end of 3 years = $4960

b) Formula for Rate , R = 100I/(PT)

Where I = Interest = 960, P = Principal = 4000, T= Time = 3 years

R = (100 × 960) / ( 4000 × 3)

R = 8

Rate, R = 8% per annum.

c) If the rate was 1% more, R = 8 + 1 = 9% per annum

Interest, I = PRT/100

Interest, I = 4000 × 9 × 3 /100 = 1080

Amount in her account would have been = $4000 + $1080 = $5080

Amount more = $5080 - $4960 = $120

She would have had $120 more should the rate were 1% greater.

step-by-step explanation:

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